Chevron Lobbied For Corporate Sovereignty Rights In TAFTA/TTIP To Act As 'Environmental Deterrent'

from the they're-not-even-trying-to-hide-it-anymore dept

Back in 2014, Techdirt noted that arguably the most serious problem with corporate sovereignty was not the huge awards that could be imposed on countries, but the chilling effect the mere threat of those awards could have on national sovereignty. In that post, we quoted from a remarkable 2001 article in The Nation. A former Canadian government official in Ottawa revealed that numerous proposals for new environmental regulations had been dropped in the face of threats that NAFTA's investor-state dispute settlement (ISDS) framework would be used against Canada if it brought in new laws. The Techdirt post also mentioned a case in Indonesia, where a mining company dropped a corporate sovereignty case when it was offered "special exemptions" from a new mining law.

More recently, we've seen New Zealand put on hold its plans to require plain packaging for cigarettes, as a result of Philip Morris bringing an ISDS claim against the Australian government for doing the same. The New Zealand government was concerned it too might get hit, and so decided to wait. Now that the Australian case has been thrown out, New Zealand is pressing ahead with its plain packs legislation.

The chilling effects of corporate sovereignty are now so well established that companies are even beginning to cite them as a reason for including it in trade deals. The minutes of a meeting that took place between European Commission officials, and Chevron executives, obtained by The Guardian, make that plain:

"ISDS has only been used once by Chevron, in its litigation against Ecuador," say the minutes of a meeting in April 2014 between unnamed Chevron executives and European commission officials, which the Guardian obtained under access to documents laws. "Yet, Chevron argues that the mere existence of ISDS is important as it acts as a deterrent."
Chevron is talking about the multi-billion dollar award made against Ecuador in one of the longest-running and most complex disputes involving corporate sovereignty. When contacted by The Guardian, Chevron repeated its claim that ISDS was a really great weapon to wield against countries, although naturally it expressed that view in somewhat different language:
ISDS serves a useful function of encouraging investors and host states to negotiate in good faith in order to avoid escalation of disagreements that occasionally arise.
Aside from confirming people's worst fears about the chilling effects of corporate sovereignty, Chevron's candid admission that it wants ISDS in TAFTA/TTIP as a "deterrent" reveals something else. It shows that corporations not only demand a unique privilege to circumvent national legal systems using secret tribunals composed of corporate lawyers, but are now trying to craft yet another "right": to deploy routinely the mere threat of ISDS as a "deterrent" to government action. Or, as you and I would put it, the right to engage in raw, brutal bullying on a global scale.

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Filed Under: chilling effect, corporate sovereignty, isds, lobbying, tafta, tpp, trade agreements, ttip
Companies: chevron

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  1. icon
    freedomfan (profile), 29 Apr 2016 @ 11:42am

    Is the issue totally one-sided or just mostly one-sided?

    There's a lot of outrage here because it's Chevron and blah-blah-environment. I get that and it's understandable that people want governments to be able to protect the environment.

    But, a central point of the article is that ISDS sometimes discourages legislatures and regulatory bodies from taking actions that they know will provoke ISDS lawsuits. In other words, they won't be as tempted to write certain laws and so on if they know an ISDS suit may conclude they have gone too far. (Keep in mind that it's far from a foregone conclusion that an ISDS suit will be successful.) My question is: Is that always such a bad thing? What if Apple had been able to sue the FBI over its attempted use of the All Writs Act? What if the next time Congress considers a law like SOPA/PIPA, they have to worry that Google is going to sue the crap out of whatever agency tries to enforce it? In other words, what if the potential for such a suit makes Congress hesitate before it passes the next marginal law?

    (Of course, I understand that in most cases the disincentive is very limited because the legislators and bureaucrats don't personally pay for anything they do that exposes this or that agency to ISDS liability.)

    BTW, this isn't some general defense of ISDS; like any legal mechanism, it will be abused. But, it's worth keeping in mind that (popular or not) government actions aren't always right and that it isn't necessarily a bad thing when it has to consider consequences of those actions, even when the actions purport to affect an unpopular target, like a corporation.

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